Shelton V Krug

Key Facts

Issues

• The court granted an injunction compelling Krug to submit monthly reports, pay all contributions, and allow the Fund to audit her records, citing her repeated noncompliance from January 2019 to the present and lack of participation in the judicial process.
• The court evaluated Shelton's damage calculation methodology using a 40-hour workweek assumption for missing reports, accepted the estimate as reasonable under precedent, and awarded $51,707.75 in total damages (contributions, liquidated damages, interest, fees, and costs).
• The court addressed whether Kelly Krug violated ERISA and the Trust Agreement by failing to make monthly contributions and submit hours reports for three groups of Unit Service Workers in Buffalo Public Schools from January 2019 to November 2023, establishing her liability under 29 U.S.C. § 1145.

Holdings

• The court awarded $9,195 in attorney's fees and litigation costs, finding the rates and work performed (attorney at $400/hour, paralegal at $155/hour) to be within typical standards for this district and the fees justified.
• The court affirmed the plaintiff's right to audit the defendant's records, citing ERISA and the Trust Agreement §4.4, which authorize trustees to review employer records to ensure compliance with contribution and reporting obligations.
• The court held that the defendant is liable for delinquent contributions under ERISA, as she failed to make required contributions to the employee benefit plan for three groups of Unit Service Workers at Buffalo Public Schools from January 2019 to November 2023. This liability is established based on ERISA §1145 and the collective bargaining agreement.
• The court granted $42,512.75 in damages, including $31,910 in delinquent contributions, $4,786.50 in liquidated damages, and $5,816.25 in interest, based on the plaintiff's reasonable estimate using union data and prior hours worked.
• The court granted an injunction requiring the defendant to comply with reporting and contribution obligations, submit to an audit, and make all appropriate records available, citing her history of noncompliance and lack of engagement in the judicial process.
• The court approved the plaintiff's calculation method for contributions, relying on union-provided employee lists and assuming a 40-hour workweek, as similar estimates have been accepted in prior cases for default judgment scenarios.
• The court determined that the defendant is liable for delinquent monthly reports, as she did not submit required reports summarizing hours worked and contributions due for the same employee groups, violating the collective bargaining agreement's terms.

Remedies

• The Court granted $9,195.00 in attorney's fees and litigation costs, justified by the attorney's hourly rates ($400) and paralegal rates ($155), as well as documented work hours and expenses. These fees were deemed reasonable and consistent with district norms.
• The Court ordered an injunction mandating Krug to (1) submit monthly reports and pay all contributions due under the collective bargaining agreement, (2) permit an audit of her records, and (3) comply with ongoing reporting and contribution obligations. This relief was granted to enforce ERISA and contractual compliance.
• The Court awarded $42,512.75 in damages, comprising $31,910.00 in delinquent contributions, $4,786.50 in liquidated damages, and $5,816.25 in interest. These amounts were calculated based on estimated contributions for three employee groups, with liquidated damages and interest derived from the Trust Agreement's terms.

Monetary Damages

Legal Principles

• The court required the plaintiff to prove damages to a 'reasonable certainty' under the default judgment framework. Despite the defendant's failure to provide reports, the plaintiff's estimate of delinquent contributions (based on prior high-hour data) was accepted as reasonable and accurate under the circumstances, as per precedent in similar ERISA cases.
• The court granted an injunction requiring the defendant to comply with reporting obligations, submit to an audit, and pay future contributions. This relief was authorized under ERISA § 1132(g)(2)(E) for equitable enforcement of statutory and contractual duties, as the defendant demonstrated no willingness to comply with prior obligations or participate in the judicial process.
• The court awarded attorney's fees and litigation costs ($9,195) under ERISA's provision for equitable relief. The fees were justified as reasonable for this district, with the attorney's hourly rate ($400) and paralegal's rate ($155) deemed within normal parameters, supported by billing records and prior case law.
• The court applied Rule 55 of the Federal Rules of Civil Procedure to grant default judgment against the non-responding defendant. Under this rule, a default is entered when a party fails to plead or defend, and the plaintiff must establish liability and damages to a reasonable certainty. The well-pleaded allegations of the complaint were deemed admitted, justifying liability for delinquent contributions, reports, and audit rights under ERISA and the Trust Agreement.

Precedent Name

• Hanley-Wood LLC v. Hanley Wood LLC
• Bricklayers & Trowel Trades Int'l Pension Fund v. Barron
• Central States, Se. & Sw. Areas Pension Fund v. Cent. Transp., Inc.
• Bricklayers & Trowel Trades Int'l Pension Fund v. Kel-Tech Constr., Inc.
• Flynn v. Extreme Granite, Inc.
• Carpenters Lab.-Mgmt. Pension Fund v. Freeman-Carder LLC
• Fanning v. AMF Mech. Corp.
• Nat'l Shopmen PensionFund v. Builders Metal Supply, Inc.
• Int'l Painters & Allied Trades Indus. Pension Fund v. LaSalle Glass & Mirror Co.
• Boland v. Smith & Rogers Constr. Ltd.
• Boland v. Yoccabel Const. Co.

Cited Statute

Judge Name

Passage Text

• Default judgment is appropriate when an opposing party is 'totally unresponsive.' See Hanley-Wood LLC v. Hanley Wood LLC, 783 F. Supp. 2d 147, 150 (D.D.C. 2011) (cleaned up). That is true here. Krug did not respond to the Complaint or this default judgment motion. Nor has she moved to set aside the default. Accord AMF Mech. Corp., 326 F.R.D. at 14. So the Court need only determine whether Shelton's allegations establish liability. See Downs v. JSP Cos., Inc., 297 F. Supp. 3d 163, 168 (D.D.C. 2018). They do.
• Faced with a defendant's failure to provide reports necessary for calculating contributions, other courts have approved similar estimates. See, e.g., Nat'l Shopmen Pension Fund v. Builders Metal Supply, Inc., 304 F.R.D. 47, 50 (D.D.C. 2014) (approving a contribution estimate based on the 'highest amount of hours reported to the Fund' the prior year); Int'l Painters & Allied Trades Indus. Pension Fund v. LaSalle Glass & Mirror Co., 267 F.R.D. 430, 434 (D.D.C. 2010) (accepting as reasonable the plaintiffs' damage calculation using an average of existing reports); Flynn v. Extreme Granite, Inc., 671 F. Supp. 2d 157, 162 (D.D.C. 2009) (emphasizing 'the defendant's failure to provide periodic reports or allow the plaintiffs access to the defendant's books and records' before accepting the plaintiffs' estimate). The Court agrees and accepts Shelton's estimate 'as both reasonable and as accurate as possible under the circumstances.' Extreme Granite, 671 F. Supp. 2d at 162.
• For these reasons, the Court will grant Shelton's motion for default judgment. Krug must pay $51,707.75, representing the unpaid contributions, interest, liquidated damages, attorney's fees, and costs due. She must also provide the missing reports, submit to an audit, and comply with her contribution and reporting obligations. A separate order will issue today.